Download Social Policy in Colombia during the 1990s: The failure of good

Social Policy in Colombia
during the 1990s:
The failure of good intentions
Alejandro Gaviria
Outline

Antecedents


Results:




Constitutional and legal mandates about social spending.
Education
Health
Labor training
Conclusions
Antecedents

New Constitution gave priority to social
spending.

Social spending was given constitutional and
legal protection.
Social spending in the
Constitution
ARTICULO 350… Excepto en los casos de guerra exterior o por
razones de seguridad nacional, el gasto público social tendrá
prioridad sobre cualquier otra asignación.
ARTICULO 366. … Será objetivo fundamental de la actividad del
Estado la solución de las necesidades insatisfechas de salud, de
educación, de saneamiento ambiental y de agua potable. Para
tales efectos, en los planes y presupuestos de la Nación y de las
entidades territoriales, el gasto público social tendrá prioridad
sobre cualquier otra asignación.
Constitution specifies the amount
of social spending

Level of spending on education, health and
water is specified by the Constitution.


Growth rate: 2% plus last year inflation.
Labor training, child care, nutrition and other
socials programs are financed with payroll
taxes. Level of spending is legally mandated.
Provision of services:

Education, health and water are provided in a
decentralized fashion.

Other programs are still centralized.
Social spending increased twofold
805
16,00
705
14,00
605
12,00
505
10,00
405
8,00
305
6,00
205
4,00
105
2,00
5
0,00
1975
1980
1985
1990
1993
1997
1998
1999
2000
2001
Pecapita. Miles de $ Constantes de
2001
191
243
248
289
371
693
695
584
515
588
%PIB
6,67
7,55
7,83
8,21
9,96
14,53
14,76
13,18
11,53
13,36
Año
% PIB
PC
Gasto público social. Administraciones Públicas 1975-2001
Results: education

Public education:



Increase in teacher’s wages.
Marginal increase in coverage rates.
No advances in quality.
Public sector teacher’s wages:
Wage premium
1991
-4,5%
1994
-10,5%
Comparison group: private sector wage earners with
similar socioeconomic characteristics.
2000
7,9%
Enrollment rates: basic
education
90%
70%
Primary
Secondary
50%
30%
1993
1997
2003
Quality differences: private vs.
public
58
56.4
56
54.5
53.1
54
52
50.9
50
49.6
50.0
48
46
80
82
84
86
88
91
94
96
98
Education reform

Romantic stage: decentralization was going
to solve all the problems.


Local political markets didn’t work.
Scientific stage: capitation transfers.

Centralization of payroll decisions make legal
mandates irrelevant.
Results: health

Health reform in Colombia is considered one
most ambitious policy interventions
undertaken in Latin America.

Health system has been consistently ranked
as number one in LAC by the WHO and
OPS.
Main premises of the reform

Transformation from a supply-driven system to
a demand-driven one.

The poor were provided with a voucher that
allow them to buy health services through an
insurance company.

Goals: full coverage and full transformation of
resources within ten years.
Results I:

The proportion of poor people with insurance rose
from about 5% to about 50%.

Use of services increased substantially:
Variable
Visited a doctor upon falling ill
Did not visit a doctor because lacked money
Was referred to an specialist after visiting doctor
Out-of-pocket payments
Uncovered
Covered
51,4%
72,5%
68,2%
43,2%
14,7%
17,0%
$
47.120 $
25.029
Results II:

Only 20% of resources (“subsidized regime”) go to
the public hospitals. The public sector network
maintained its original size.
Intended
Public Hospitals
Sources of revenue
Transfers
Services sale
2003
$
$$$$
Actual
Public Hospitals
Sources of revenue
Transfers
Services sale
2003
$$$$
$
Transformation of resources:
1.400.000
1.200.000
1.000.000
800.000
600.000
400.000
200.000
0
1993
Total resources
1994
1995
1996
Transformed resources (intended)
1997
1998
1999
Transformed resources (actual)
Health and consumption
outcomes:
insured vs. uninsured
Geographical matching
Comparison:

No differences between people with insurance
and people without are apparent in:




Per capita consumption
Birth weight
Respiratory diseases
Nutrition indicators
Transfomation AGAIN:

The case of SENA:

Available evidence suggests inefficiencies: low
rate of return.

Proposal: separate the financing from the
provision, and transform resources from supply to
demand.
but…
Conclusions

Romantic reforms: increase spending and
decentralized.

Scientific reforms: demand subsidies and
capitation.